ProMove, Inc. v. Siepman
ProMove, Inc. v. Siepman
Opinion of the Court
Plaintiffs ProMove, Inc., and Logisys, Inc. (collectively, Plaintiffs), brought this action against ProMove's former employees Mark Siepman and Joseph Hammerslough (the individual defendants) as well as Sunset Transportation LV, Inc., and Tantara Transportation Group (the corporate defendants), asserting multiple claims, including breach of contract, tortious interference with contract, and misappropriation of trade secrets. Defendants collectively move to dismiss for lack of personal jurisdiction or, alternatively, to transfer this case to the United States District Court for the District of Nevada. Defendants' motion to dismiss is granted in part and denied in part, and the motion to transfer venue is denied.
BACKGROUND
ProMove is a Minnesota corporation with its principal place of business in Las Vegas, Nevada. Logisys, an affiliate of ProMove, is a Michigan corporation with its principal place of business in Chicago, Illinois.
The individual defendants are residents of Las Vegas, Nevada, and former employees of ProMove in Las Vegas. Tantara Transportation Group is a Michigan corporation with its principal place of business in Canton, Michigan. Sunset Transportation LV, Inc., is a Nevada corporation with its principal place of business in Las Vegas, Nevada. Both corporate defendants are direct competitors of ProMove.
Prior to September 2012, the individual defendants owned and operated Lightning Logistics, LLC, in Las Vegas. Logisys purchased Lightning Logistics and retained the individual defendants as employees. The individual defendants, who were ProMove employees for approximately five years, executed employment agreements with ProMove that included confidentiality and non-compete clauses, as well as a choice-of-law and forum-selection clause stating that each party to the agreement "irrevocably submits itself to the non-exclusive personal jurisdiction of the Federal and State courts sitting in Minnesota."
Plaintiffs allege that, while employed by ProMove, the individual defendants made preparations to leave ProMove with the intent to begin employment with the corporate defendants, including the solicitation of ProMove's employees and customers *820on behalf of the corporate defendants. Plaintiffs allege that the corporate defendants knowingly assisted with this preparation. Plaintiffs also allege that, before leaving ProMove, Hammerslough copied proprietary and confidential information from ProMove computers with the intent to benefit himself, the corporate defendants, or both.
ANALYSIS
I. Defendants' motion to dismiss for lack of personal jurisdiction
Because Defendants move to dismiss for lack of personal jurisdiction, Plaintiffs must make a prima facie showing that personal jurisdiction exists. K-V Pharm. Co. v. J. Uriach & CIA, S.A. ,
Minnesota's long-arm statute extends jurisdiction to the maximum limit permitted by due process. Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc. ,
Due process requires that a nonresident defendant have sufficient minimum contacts with the forum state such that personal jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." World-Wide Volkswagen Corp. v. Woodson ,
Personal jurisdiction over a defendant may be general or specific. See Burger King Corp. v. Rudzewicz ,
The Court considers three primary factors when deciding whether it has specific jurisdiction over the defendants: the nature and quality of such contacts with the forum state, the quantity of contacts, and the relation of the cause of action to the contacts. K-V Pharm. ,
A. Individual Defendants
Plaintiffs seek to establish a prima facie showing of personal jurisdiction over the individual defendants based primarily on the employment agreements, which include a forum-selection clause that prescribes that each contracting party submits to personal jurisdiction in the state and federal courts of Minnesota.
"Due process is satisfied when a defendant consents to personal jurisdiction by entering into a contract that contains a valid forum selection clause." Dominium Austin Partners, L.L.C. v. Emerson ,
Strong circumstantial evidence exists that the individual defendants voluntarily consented to the terms of the employment agreements, including the forum-selection clause. Before Logisys purchased Lightning Logistics in 2012, each individual defendant executed a Letter of Intent with Beltmann Group Incorporated (BGI)
Moreover, other factors support the requisite "minimum contacts" for personal jurisdiction. The individual defendants were ProMove employees for slightly less than five years and, although there are no allegations that either traveled to Minnesota, both individual defendants were employees of ProMove, a Minnesota company. They both executed the Letter of Intent with BGI, also a Minnesota company. And that letter clearly displayed in the letterhead BGI's Roseville, Minnesota address. Jeanne Considine, BGI's vice president of accounting, also stated by affidavit that each individual defendant "submitted expense reports directly to Minnesota via Federal Express on at least [a] monthly basis, and sometimes weekly." And these expense reports, as well as the individual defendants' paychecks, were processed in Minnesota.
Based on the totality of the circumstances, when the evidence is viewed in the light most favorable to Plaintiffs, Plaintiffs have made a prima facie showing that the individual defendants voluntarily consented to personal jurisdiction in Minnesota through their employment with ProMove. For these reasons, the Court denies Defendants' motion to dismiss for lack of personal jurisdiction with respect to each individual defendant.
B. Corporate Defendants
Plaintiffs argue that the corporate defendants are also bound by the forum-selection clause in the individual defendants' employment agreements. At issue here is whether a forum-selection clause in a contract to which the company is not bound is sufficient to meet the due process requirements of personal jurisdiction.
To advance its argument, Plaintiffs rely on Medtronic, Inc. v. Endologix, Inc. , in which Medtronic initiated a lawsuit against two former employees and their new employer, Endologix, in Minnesota state court.
The decision in Medtronic is distinguishable as the issue was not whether personal jurisdiction existed, and there was no consideration of whether the "closely-related-party" rationale satisfies constitutional due process for personal jurisdiction purposes. Without more, the presence of a forum-selection clause in a contract to which the corporate defendants were not parties, and of which they may have been completely unaware, is not sufficient to establish personal jurisdiction over the corporate defendants.
Plaintiffs also argue that the corporate defendants' tortious conduct subjects them to personal jurisdiction in Minnesota under the Calder "effects test." See generally
*823
Plaintiffs have not asserted that the corporate defendants engaged in direct and intentional conduct such that the corporate defendants were aware that the effects of the conduct would substantially impact Minnesota. Rather, Plaintiffs assert that the corporate defendants "market themselves to residents of Minnesota via their websites." Merely maintaining a commercial website that does not specifically target residents of a forum state, however, is insufficient to confer personal jurisdiction. See, e.g. , Bible & Gospel Tr. v. Wyman ,
Because Plaintiffs provide no evidence of any other contacts between the corporate defendants and Minnesota, Plaintiffs have not made the requisite prima facie showing that exercising personal jurisdiction over the corporate defendants would be proper. The motion to dismiss for lack of personal jurisdiction is granted as to the corporate defendants.
II. Defendants' motion to dismiss under forum non conveniens or to transfer to the District of Nevada
In light of the Court's conclusion that personal jurisdiction exists over the individual defendants, the Court must address the individual defendants' alternative argument that the complaint should be dismissed under the doctrine of forum non conveniens . But dismissing this case under the common-law doctrine of forum non conveniens is not appropriate. "[A] federal district court's power to dismiss a case properly within its jurisdiction under the common-law doctrine of forum non conveniens has been substantially eliminated by the federal transfer of venue statute,
In their reply memorandum-ostensibly in response to Plaintiffs' argument that dismissal under forum non conveniens is inapplicable-Defendants restyle their motion as one to "transfer to a more appropriate venue," as well as a motion to dismiss. As a general rule, such arguments are not entertained when raised for the first time in a reply brief. See Torspo Hockey Int'l, Inc. v. Kor Hockey Ltd. ,
*824A district court may transfer a civil action, in the interests of justice, to any other federal district court that has jurisdiction when doing so is "[f]or the convenience of parties and witnesses."
A district court in a typical case in which there is no applicable forum-selection clause "must evaluate both the convenience of the parties and various public-interest considerations" when evaluating a motion to transfer venue under Section 1404(a). Atl. Marine , 571 U.S. at 62,
Here, Defendants reiterate their arguments that "Plaintiffs have failed to demonstrate the existence of a binding agreement" containing a valid forum-selection clause. But this argument does not account for the "heavy burden" that rests with Defendants to demonstrate that transfer should be granted. Bae Sys. ,
The Court is mindful that, as Plaintiffs argue, a Minnesota forum is inconvenient for the individual defendants, particularly Siepman, who has a medical condition that impedes his travel. The Court also acknowledges that several of the participants in this case are located in Nevada, and that many of the events alleged in Plaintiffs' complaint took place there. But Defendants' burden "may not be met simply by showing that the [relevant factors] are evenly balanced or weigh only slightly in favor of transfer."
ORDER
Based on the foregoing analysis and all the files, records and proceedings herein, IT IS HEREBY ORDERED that Defendants' motion to dismiss, (Dkt. 9), is DE NIED
*825with respect to Defendants Mark Siepman and Joseph Hammerslough, GRANTED with respect to Defendants Sunset Transportation LV, Inc., and Tantara Transportation Group, and Plaintiffs' complaint, (Dkt. 1), is DISMISSED WITHOUT PREJUDICE as to Sunset Transportation LV, Inc., and Tantara Transportation Group.
The events addressed in this background section are alleged in Plaintiffs' complaint, and they are accepted as true for the purpose of this pending motion to dismiss. See Blankenship v. USA Truck, Inc. ,
A court may assert general jurisdiction over a defendant if the defendant's contacts are so "continuous and systematic" as to render the defendant "essentially at home" in the forum state. Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG ,
BGI is an affiliate of the plaintiffs and is not a party to this case.
Reference
- Full Case Name
- PROMOVE, INC. and Logisys, Inc. v. Mark SIEPMAN, Joseph Hammerslough, Sunset Transportation LV, Inc., and Tantara Transportation Group
- Cited By
- 7 cases
- Status
- Published